With the surging international fuel prices, it seems that Egypt’s fuel hikes would only emulate the global scene

Newsletter

29 Jun 2022

With the surging international fuel prices, it seems that Egypt’s fuel hikes would only emulate the global scene. But will these hikes reach their maximum capacity and what impacts will they have on citizens? Egypt’s fuel automatic pricing committee will convene its quarterly meeting to assess the prices of petroleum products by the first week of July right before Eid Al-Adha, Minister of Petroleum and Mineral Resources Tarek El-Molla told Lamis Al-Hadidy on June 18th. When the government hikes prices right before a national holiday, people seem to think it is on purpose and that this has a political dimension, one source that required anonymity told Arab Finance. But in fact, it is much simpler than this as the quarterly meeting just coincides with the holiday. This would be the third time in a row this year for the committee to raise the prices, as they were raised by EGP 0.25 in the first two meetings in 2022. (Arab Finance & Zilla Capital)

Fuel prices in the Gulf region are seeing a sharp increase, whereas the oil-rich UAE has seen a 56% rise in fuel prices in the last five months and is expected to gradually affect the prices of other products and services in the country.
In response to the rising fuel prices, other countries are introducing different schemes to cushion the effect. A country like Germany, for instance, has introduced a €9 monthly ticket to provide access to public transportation. The German government’s initiative aims to lower people’s daily fuel consumption, diverting them into using public transportation such as trains, buses and metro for all their local and regional travels. Accordingly, fuel prices went down from 2.5 EUR per litre to 1.5 EUR per litre. Egypt could learn from such schemes. As global prices do not seem to cool down any time soon, Egypt could face a similar hike again in the fourth quarter of the year. Thus, the Egyptian petroleum sector should seek a different method to cope with the global economic crisis. (Arab Finance & Zilla Capital)
Egyptian Ministry of Petroleum and Mineral Resources has agreed to study possible cooperation opportunities with Norway’s Scatec in the field of green ammonia production.
Egypt supports all the international companies that seek to invest in green energy and emissions reduction to help the country to become a key hub for trading all energy resources. The mutual interest in cooperating with the Egyptian government in green hydrogen and ammonia projects. Moreover, the signed memorandum of understanding (MoU) with the Suez Canal Economic Zone (SCZONE), the Ministry of Electricity, and the Sovereign Fund of Egypt to establish a plant for the production of green ammonia in Egypt. (Arab Finance)
The Egyptian government has allocated 130 billion EGP to finance a social protection package for dealing with the consequences of the ongoing Russian-Ukrainian war.
The package will help to alleviate the sharp impacts of the global inflationary wave on the most affected sectors in the country, Minister of Finance Mohamed Maait said during his meeting with members of the American Chamber of Commerce in Egypt. The minister stressed that the government is keen on providing the key needs of citizens and securing a strategic reserve of food commodities, along with the arrangement of 36 billion EGP to purchase 6 million tons of local wheat. (Al Mal)
In addition, the government is planning to exit from 79 sectors and to make less investments in another 45 sectors, which will pave the way for the private sector to attract investments of $40 billion over the coming four years, the minister stated.
Luring local and foreign investments into Egypt is a presidential priority to achieve economic goals, he noted. This comes in line with the promising investment opportunities in various sectors and green projects and the partnerships with the private sector that will boost general investments to 65% from 30% over the next three years, Maait highlighted. (Al Mal)
Egyptian Ministry of Petroleum has cut its dues to the Ministry of Finance by 283 billion EGP to reach 51 billion EGP now from around 334 billion EGP on June 30th 2018, Minister of Petroleum and Mineral Resources Tarek El-Molla stated on June 28th.
Dues of the petroleum ministry to the Ministry of Public Business Sector have fallen to 6.5 billion EGP now, compared to 14.5 billion EGP at the end of June 2018, El-Molla noted. The petroleum ministry is working on collecting the dues to different ministries amid the current increases in global oil prices, the minister added. Meanwhile, Minister of Public Business Sector Hisham Tawfik noted that his ministry has paid off nearly 90% of old debts, noting that any new debts will be settled as soon as possible. For his part, Minister of Electricity Mohamed Shaker said that his ministry seeks to collect its dues to a number of entities, in order to settle liabilities. This came in the context of the meeting held by Prime Minister Mostafa Madbouly to discuss resolving of government’s financial entanglements. (Mubasher)
The Egyptian Cabinet has agreed to allocate 105.18 acres of the state’s owned land plots in the governorate of Sharqia for the establishment of an investment zone.
The investment zone will be based on various industrial activities, including factories for sorting and packing vegetables and fruits and juices and food industries factories, along with other projects. The cabinet has also approved the allocation of 24.71 acres of the state’s owned land plots in El-Minya to set up a solar power plant with the investments of the private sector. Moreover, the cabinet has decided to assign 36 projects to the ministries of housing and transport, the Urban Development Fund, and the General Authority for Educational Buildings. (Arab Finance)
Moreover, the Egyptian Cabinet has approved the establishment of a new private university in Matrouh under the name of the Egyptian University in Alamein.
The new university will include eight faculties, including dentistry, physical therapy, nursing, engineering, administrative and political science, computers and artificial intelligence, mass communication, and applied sciences. Also, the Cabinet has approved an amendment to some provisions of the Presidential decree No. 147 of 2007 regulating the establishment of the Delta University for Science and Technology in Dakahlia. Accordingly, four new faculties will be set up in the private university in Mansoura city. The cabinet has also endorsed a draft law regarding the amendment of some provisions of the Presidential decree No. 118 of 2013 on the establishment of the Egyptian Chinese University in Cairo, upon which new five faculties will be set up in the university. (Arab Finance)
Egyptian Prime Minister Moustafa Madbouly has directed relevant ministries, the Central Bank of Egypt (CBE), and the banking sector to coordinate on setting a mechanism for the regulated release of car shipments over the coming period.
Moreover, Madbouly has discussed the measures taken to facilitate the process of releasing imported cars with the relevant ministries and authorities. For her part, Minister of Trade and Industry Nevine Gamea stated that she constantly contacts the representatives of automotive companies in Egypt, noting that some measures were taken over the past period to accelerate the release of imported vehicles. Meanwhile, the representatives of the automotive companies said that the exceptional global conditions are temporary. (Arab Finance)
e-finance for Digital and Financial Investments (EFIH) has entered into a partnership with the Ministry of Petroleum and Mineral Resources to develop infrastructure for the digitalization of gas stations across Egypt.
Through its two subsidiaries, namely e-finance for Digital Operations and eKhales, the group will transform gas stations across the country into integrated centers offering digital financial services that are accessible to all Egyptians. Services to be offered include withdrawal, deposit, transfers, bill settlement, and electronic payment. Moreover, e-finance has offered three service categories in over 400 gas stations across Egypt. It also designed a system for the smart management of fuel transport fleets, replacing the paper coupon system. (Arab Finance)
Tasaheel, a subsidiary 57.26%-owned by GB Auto (AUTO), has securitized 2.7 billion EGP of its loan book with Commercial International Bank Egypt (CIB) (COMI).
The proceeds will be used to boost growth and expansion, the company said. The offering was oversubscribed by 2x, reflecting a diverse portfolio that includes 137,000 contracts. The issuance was divided into four tranches. Among participants in the offering are Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait, Al Baraka Bank, Agricultural Bank of Egypt, and Housing and Development Bank (HD Bank) (HDBK). (EGX)